How do Solar Panels Lower my Electricity Bill?

Electricity bills are a significant expense for New South Wales (NSW) locals, with 63.4% of Australians* reported to be stressed by their electricity bill. All the while costs only continue to rise as time goes on. As you may have guessed, there’s a sustainable solution that not only reduces your electricity bills, but also provides long-term economic benefits. Yep, it’s solar panels. We explore how solar panels can lower your electricity bills and provide financial relief for your future.

How do solar panels lower my electricity bill?

Why are electricity bills expensive and unpredictable?

Electricity bills are comprised of the amount of electricity consumed and the rate charged by a utility company. Locally, rising energy costs are driven by transmission charges (the process of delivering generated electricity), inflation and regulatory decisions by entities like the Australian Energy Regulator (AER). Forecasts as recent as last week (at the date of publishing this blog), indicate that electricity bills are set to increase in NSW due to rising transmission costs imposed by the AER.

Electricity bill forecast: Rising costs

As we mentioned, the latest update from the AER indicates that transmission charges are expected to rise significantly in different parts of the country over the next five years. For us in NSW, customers served by Ausgrid, Endeavour Energy and Essential Energy will face higher electricity bills ranging from $14 to $39 annually. These increases are attributed to interest rates and inflation, highlighting ongoing financial challenges for locals. While that sounds low as an annual expense, it only adds to already exorbitant bills.

Source: Electricity bills rising as energy regulator increase costs

How solar panels actually lower electricity bills

Solar panels are no doubt a compelling solution to combat soaring electricity costs. By harnessing sunlight to generate clean energy, solar systems give power back to homeowners and businesses by reducing dependency on the grid. Which, offsets electricity consumption costs.

With net metering, where excess solar energy is sent back to the grid for credits, you can lower your overall electricity bill even further. Another opportunity up for grabs is feed-in tariffs. Feed-in tariffs allow you to earn a pre-set rate for any excess energy you feed back into the grid, too.

Economic benefits of solar panels

A key advantage of solar panels is their economic benefits. By fixing electricity costs at a lower rate through solar installations, homeowners and businesses can achieve significant long-term savings by paying much less than the average 33.84c/kWh in NSW*. The difference, which varies in respect to each owners circumstances, translates to substantial costs savings and financial returns over the lifespan of a solar system.

Long-term savings and return on investment (ROI)

Investing in solar panels is a smart decision for long-term savings and ROI. Over a 15 year lifespan, solar installations can deliver incredible financial benefits through reduced electricity bills and potential revenue from excess energy production. Calculations show that households and businesses can achieve significant savings, exceeding the initial investment in solar panels. We’ve inserted a very generalised example for you, from one of our other blogs, which helps to exemplify this:

Let’s say you live in Kingscliff and your monthly electricity bill averages $225. You don’t foresee any changes to your future energy usage. So, over the next 15 years, you would pay an estimated total of $40,500 for electricity.

Now, let’s say you purchase a 6kW solar system for around $7,000 (after rebates and incentives are applied). This solar system is expected to cover 100% of your energy usage.

$40,500 – $7,000 = $33,500

So, in this example, your net savings over a 15-year lifespan would be an incredible $33,500!

This is obviously a very simplified example. Actual savings will depend on your unique circumstances, so it’s best to consult with a specialist like us to determine the potential cost savings for you.

Chances are, you’re one of the 63.4% of Aussies facing financial distress over your electricity bill. Solar panels provide a practical and sustainable solution to lower electricity bills. By leveraging solar energy, you could limit the impact of soaring electricity bills, and achieve long-term cost savings. If you’re looking to reduce your electricity bills, explore the potential savings solar panels offer for you and your circumstances.

Need help? Call us on 1300 4 SOLAR.

* Source: What is the average (kWh) cost of electricity in Australia?

How do Solar Panels Lower my Electricity Bill?